Business

Google Posts Strong Earnings as Co-Founder Larry Page Is Named CEO

Google reported another very strong quarterly earnings performance Thursday, but the results were overshadowed by the company’s dramatic announcement that CEO Eric Schmidt will become non-executive Chairman and co-founder Larry Page will take over the chief executive officer duties. The Mountain View, California-based company said that net income rose to $2.54 billion, or $7.81 per […]
Image may contain Wristwatch and Gauge
At a time when the average family sedan struggled to top 80 mph, the Jaguar lapped Le Mans at 100-plus-mph average speeds. Note counterclockwise tachometer.

Google reported another very strong quarterly earnings performance Thursday, but the results were overshadowed by the company's dramatic announcement that CEO Eric Schmidt will become non-executive Chairman and co-founder Larry Page will take over the chief executive officer duties.

The Mountain View, California-based company said that net income rose to $2.54 billion, or $7.81 per share, on revenue of $6.37 billion, which exceeded Wall Street expectations. That's a 29 percent increase from last year's fourth-quarter net income, which was $1.97 billion, or $6.13 per share.

UBS analysts Brian J. Pitz and Brian P. Fitzgerald -- aka Pitz and Fitz -- called Google's earnings results "impressive" and wrote to clients that the results are being "driven by momentum in new businesses like display and mobile." Pitz and Fitz reiterated their price target of $735 for the stock.

Google shares jumped nearly two percent in after-hours trading to $638.00. Google went public at $85 per share in a Dutch Auction nearly seven years ago and has never split its stock.

Paid clicks, which are a measure of how often people are clicking on Google advertising products, increased 18 percent compared to one year ago, beating analyst expectations. International sales accounted for 52 percent of the company's revenues.

"Our strong performance has been driven by a rapidly growing digital economy, continuous product innovation that benefits both users and advertisers, and by the extraordinary momentum of our newer businesses, such as display and mobile," Schmidt said in a statement.

Google said it is sitting on $35 billion in cash.

There was some snarky discussion about Schmidt getting kicked upstairs or marginalized, but I don't think that's the case. It makes sense that one of Google's founders would want a crack at running the company. And after a decade at the helm, it's also understandable that Schmidt would want to move past day-to-day operations and move into more of an ambassador-type role for the company.

"It looks like Schmidt has really done his job and set up Google for the next phase," economics commentator Barry Rithholz, of The Big Picture, told CNBC.

Follow us for disruptive tech news: Sam Gustin and Epicenter on Twitter.

  • *See Also: